In an economy, unemployment exists only at points that are on the interior of the production possibilities frontier.
Answer the following statement true (T) or false (F)
True
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The demand for a good is more price inelastic if
A) its price is higher. B) the percentage of income spent on it is larger. C) it is a luxury good. D) it has no close substitutes.
The following table contains the actual prices charged by four Web sites for the PlayStation 4 game Call of Duty; Black Ops III in November 2015
Target $59.99 Walmart 59.00 Best Buy 59.99 GameStop 59.99 Explain whether the information in this table contradicts the law of one price.
One of the central predictions of neo-classical macroeconomic growth theory is that an increase in the growth rate of the population causes at first a decline the growth rate of real output per capita,
but that subsequently the growth rate returns to its natural level, itself determined by the rate of technological innovation. The intuition is that, if the growth rate of the workforce increases, then more has to be saved to provide the new workers with physical capital. However, accumulating capital takes time, so that output per capita falls in the short run. Under the assumption that population growth is exogenous, a number of regressions of the growth rate of output per capita on current and lagged population growth were performed, as reported below. (A constant was included in the regressions but is not reported. HAC standard errors are in brackets. BIC is listed at the bottom of the table). Regression of Growth Rate of Real Per-Capita GDP on Lags of Population Growth, United States, 1825-2000 (1) (2) (3) (4) (5) Lag number Dynamic multipliers Dynamic multipliers Dynamic multipliers Dynamic multipliers Dynamic multipliers 0 -0.9 (1.3) -1.1 (1.3) -1.3 (1.7) -0.2 (1.7) -2.0 (1.5) 1 3.5 (1.6) 3.2 (1.6) 1.8 (1.6) 0.8 (1.5) - 2 -1.3 (1.7) -3.0 (1.6) -2.2 (1.4) - - 3 0.2 (1.7) 1.5 (1.2) - - - 4 -2.0 (1.5) - - - - BIC -234.4 -236.1 -238.5 -240.0 -241.8 (a) Which of these models is favored by the information criterion? (b) How consistent are these estimates with the theory? Is this a fair test of the theory? Why or why not? (c) Can you think of any improved data to test the theory? What will be an ideal response?
To raise the most tax revenue, governments should consider taxing goods with:
a. income elastic demands. b. price inelastic demands. c. income elastic demands. d. income inelastic demands. e. cross price elastic demands.